The Minister of State’s comments about whole-of-life insurance policies in the Seanad in February 2018 were mainly related to the ability of the Financial Services and Pensions Ombudsman (FSPO) to investigate complaints in relating to long-term financial products within the original 6 year timeframe contained in Financial Services and Pensions Ombudsman Act 2017.
Following the examination of this issue by my Department, the Financial Services and Pensions Ombudsman Act 2017 was amended in relation to the definition of a “long term financial service”, which could include, but was not exclusively related, to whole of life insurance policies, to give the Financial Services and Pensions Ombudsman greater scope to accept complaints about such financial instruments. The amendment was made in Section 9 of the Markets in Financial Instruments Act 2018 that was enacted in October 2018.
As regard the Deputy's reference to the assignment of whole of life insurance policies to mortgages, the Consumer Credit Act 1995 provides that, except in certain specified circumstances, that a life assurance policy shall be put in place in connection with a housing loan, which is at a level that would be sufficient to replay the estimate principle amount in the event of the death of a borrower. The borrower can take out the policy from an insurance provider of his/her own choosing, or if it provides a sufficient level of cover, the borrower can assign the benefits of an existing life policy to the mortgage provider for this purpose.
Any person who has a complaint about the way a regulated financial service provider is handling such financial products, including the sale or assignment of such products, can make a complaint to the provider in the first instance or failing a resolution at that level to the FSPO.
